Various methods and systems for the sale and use of prepaid telephone calls are well known in the telecommunications industry. For example, U.S. Pat. No. 4,706,275 describes the implementation and operation of a telephone system that allows for prepayment of telephone calls, wherein credit information and a special code for a specific account are stored in memory in special exchanges, and wherein the amount of prepaid minutes in that specific account are debited as a call, made using that special code, progresses. Such systems are well known in the telecommunications industry, and a detailed description is not provided herein. Special codes are typically referred to as Personal Identification Numbers, or PINs.
It is to be understood that the special code, or PIN, which enables an end user to access a specific account can be provided in various forms, such as on a label or a phone card. For example, a phone card company sells a plurality of phone cards with distinct PINs on each of the phone cards to a phone card client, such as a retailer, a vending machine operator, a promotional advertiser, etc. The phone card client will herein be referred to as the "client." These phone cards are then typically re-sold for long distance services at retail, sold as collectibles, or given away as promotional items, by the client to an end user.
Each PIN printed on each individual phone card corresponds to a specific account that is credited with a predetermined number of telephone call units, such as minutes. In some systems, the PIN is actually the account number, which corresponds to a control code that is issued with and identifies a particular phone card. In other words, in a preferred embodiment, each PIN is linked to a predetermined number of minutes of "talk time" and to a control code.
An end user generally purchases or receives a phone card from a client. It is also possible for an end user to purchase a phone card directly from a phone card company. To place a call, the end user typically calls a special phone number, and then enters the PIN along with the phone number the end user is trying to reach. The number of units remaining in a specific account is debited by the number of units spent by the end user on telephone calls.
However, there are significant drawbacks with the way that phone cards are currently being sold and activated. These drawbacks are a concern for both clients and the phone card company that sells the cards. One drawback relates to the procedure by which the client purchases the phone cards from the phone card company.
One method that has been used is for the client to order a shipment of phone cards and pay for the entire wholesale value of the shipment of phone cards when the cards are shipped or received. This method has particularly been used by clients that sell the cards through retail channels or distribute them through promotional giveaways. This method is particularly onerous for clients because they have to pay up front for the cards, even though the actual calls made using the card may not take place for quite some time, if at all.
One alternative to having the client prepay for the cards is described in the parent to this application, Ser. No. 08/410,857. That application discloses one method and apparatus whereby an invoice is sent to the client when individual phone cards are first used by an end user. Using that method and apparatus reduces the financial burden on the clients and ensures that clients are charged for the phone card units received only if the corresponding phone card units are used by an end user.
A second drawback of either of the above described methods for billing for phone cards relates to the activation of the cards. Under present distribution methods, as described above, individual cards are sent out with PINs printed on the cards themselves. These cards can be used immediately by whomever is in possession of them. For example, a person who obtains one of these "active" cards can simply call the phone number printed on the card, enter the PIN, and talk for the number of minutes that have been allocated to that PIN. Effectively, these cards have many of the properties of cash, in that they can be used by anyone in possession of them.
This distribution system has caused a number of problems in accounting for cards. Perhaps the most serious problem relates to the theft or other loss of these cards, and the subsequent unauthorized use of the cards by persons who possess them without having paid for them. For example, in a retail environment, the "active" cards must be carefully handled because of their small size and large value, to minimize theft. This special handling therefore limits the exposure that the cards can get throughout the store, necessarily limiting their sales potential. If it were possible to display these cards throughout the store without risking a significant financial loss, the card's sales potential would likely be enhanced.
Therefore, a better solution is needed to minimize the risk of wrongful use of these cards and the inherent financial burden that wrongful use has on the client and the phone card company. A new method and apparatus are needed that will account for the sale (or other rightful transfer) of cards from the client to the end user, and ensure that the cards are not activated until and unless they are rightfully obtained.